Clarification: The final application for Race to the Top will be available in late fall.

Washington  U.S. Secretary of Education Arne Duncan today announced the Department's priorities for grants under the $650 million Investing in Innovation Fund (i3). The fund, which is part of the historic $5 billion investment in school reform in the American Recovery and Reinvestment Act (ARRA), will support local efforts to start or expand research-based innovative programs that help close the achievement gap and improve outcomes for students.

"We're making an unprecedented investment in cutting-edge ideas that will produce the next generation of school reforms," Secretary Duncan said. "The i3 competition will provide seed money for fresh ideas, help grow promising programs with a good track record and scale up programs with proven results to a national level."

Individual school districts or groups of districts can apply for the i3 grants, and entrepreneurial nonprofits can join with school districts to submit applications. Colleges and universities, companies and other stakeholders can be supporters of the projects.

Under the proposed priorities, grants would be awarded in three categories:

Scale-up Grants: The largest possible grant category is focused on programs and practices with the potential to reach hundreds of thousands of students. Applicants must have a strong base of evidence that their program has had a significant effect on improving student achievement.

Validation Grants: Existing, promising programs that have good evidence of their impact and are ready to improve their evidence base while expanding in their own and other communities.

Development Grants: The smallest grant level designed to support new and high-potential practices whose impact should be studied further.

"The $650 million Investing in Innovation competition that we are unveiling today is a challenge to school districts and nonprofits," Secretary Duncan said. "We're looking to drive reform, reward excellence and dramatically improve our nation's schools."

Grant recipients will be required to match federal funds with public or private dollars. Successful applicants will need to demonstrate how their programs will be sustainable after their federal grants are completed.

The U.S. Department of Education will collect public comment on the proposed priorities for 30 days. It plans to publish a final application in early 2010 and accept proposals in the spring. All money under the program will be obligated by September 30, 2010.

ARRA also includes the Race to the Top competition, which will reward states that are leading the way in school reform. The final application for Race to the Top will be available in late fall. The Department plans to make two rounds of grant awards in 2010. The Department may hold a separate competition for up to $350 million for states to create common assessments to measure whether students are on track to graduate and succeed in college and the workplace.

"Through ARRA, we've been able to avert an education recession and save thousands of jobs in schools across the country," Secretary Duncan said. "But we also need to invest in the next generation of school reforms and educate our way to a better economy."